Ask What Changed
By David Henderson
When you try to understand change, whether in economics or in the rest of life, one good rule is to ask what other factor or factors changed. To explain a change in one variable, we have to point to another variable that changed, not to one that stayed the same.
Asking what changed can lead us to reject some explanations and embrace others. Consider three examples: the recent California fires; cable television’s sudden decision to drop C-SPAN in the early 1990s; and the dramatic increase in heroin-related deaths.
These are the opening two paragraphs of Charles L. Hooper and David R. Henderson, “Economists Know: Ask What Changed,” the Econlib Feature Article for February.
The aforementioned Hill and Kakenmaster do point to one factor that has changed: the wildland-urban interface. Unfortunately, their data cover changes only up to the year 2000, but the period of bad fires started a decade after that. So has anything else changed dramatically lately?
Actually, yes. What has changed is precipitation. California’s three-year precipitation in 2011-2014 was the second lowest since state records were first collected in 1895, and normal precipitation levels haven’t yet returned. Trees are still suffering from the shortfall. The biggest change over the last decade isn’t temperatures or forest management—it’s a drought of historic proportions.
Read the whole thing.